First review of charities tax relief in 20 years under way

The Charity Tax Commission has launched a consultation on whether and how the tax treatment of charities – estimated to be worth around £3.7bn a year to the Treasury – needs to be reformed.

The review the first systematic look at charity tax reliefs in more than 20 years will examine the role the third sector plays in society and seek to identify ways to improve the efficiency and efficacy of the current system.

The commission will look at the full range of taxes and tax reliefs that charities and donors are subject to and benefit from – including business rates relief social investment tax relief gift aid VAT exemption and inheritance tax relief.

Specifically the commissioners are interested in receiving views on the extent to which the current system directs the activities of charities and encourages particular behaviour.

Against a backdrop of...